Company Priorities Reveal People Values and Forecast Long Term Profitability

People are usually a lower order value in many organizations, number seven (7) according to consultant Peter Block in his earlier writings. In some rarified companies, the people rank is quite a bit higher, such as with SouthWest airlines, owing to its success in fractious airline industry.

Note: This post was updated in 2013 with the addition of company examples below.

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Another author I follow, Jeffrey Pfeffer out of Stanford, comments that customer relationships are still largely built through people. Hiring the best people who are likely to stay, and investing in their training, will build relationships that can then be managed through technology supported system. Without quality staffing and training, most organizations will follow the normal path of start-up growth, maturity and decline.

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…the best organizations I’ve ever seen, the ones that are actually more profitable for the long-term, all put people before growth on their list of priorities. ~ Simon Sinek

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Budgets, priority lists, meetings, and strategy documents, which are needed aspects of running a viable business are also indicators of an organization’s values and culture. My experience in higher education has taught me that even the most decentralized, silo-ed organization carries along and passes along deeply embedded institutional values, regardless of what is printed on department mug or annual report. Those values are the skeleton on which culture is built and maintained, and with which the people priority number is set. You can quote me on that. I’ve lived it.

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Culture is not an aspect of the game. Culture is the game. — Lou Gerstner, the man who reinvented IBM

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Excerpted – Simon Sinek:

…the best organizations I’ve ever seen, the ones that are actually more profitable for the long-term, all put people before growth on their list of priorities ~ Simon Sinek

Culture is not an aspect of the game. Culture is the game. — Lou Gerstner, the man who reinvented IBM

It has been said that values are the standards by which we set our priorities. This means we can understand the values of a person or an organization by examining their priorities.

I listened to a presentation given by top executives of a large firm recently. In their presentation, they listed the company’s priorities:

1. Top line growth

2. Enhance shareholder value

3. Focus on global expansion

4. Enhance customer satisfaction

5. Our people

I think it’s safe to say, they don’t really value their people. Or at least they don’t put their people before growth. Ironically, the best organizations I’ve ever seen, the ones that are actually more profitable for the long-term, all put people before growth on their list of priorities.

…If the urgent always takes priority over the important, then how much do we value the important over the urgent?

A recent 2013 post by Fast Company on long lasting sustainable companies gives credence to the impact of a focus on good work and valuing people within the company:

Operating from 25 to nearly 225 years, these companies have maintained their commitment to mission through up and down business cycles, continued to create high-quality jobs and to improve the quality of life in our communities, and paved the way for today’s group of green, responsible, and sustainable businesses.

1) Sun Light and Power, founded in 1976, has been providing renewable energy and energy efficiency technology to California homeowners and businesses throughout on-again, off-again government support for solar.

SLP has also remained devoted to its employees and the community and became a B Corp in 2009.

Rather than subcontracting installations (a common industry practice), the company hires full-time employees and provides a living wage, health benefits, a retirement plan, and paid time off.

2) Seventh Generation, founded in 1988, is one of the nation’s most recognized brands of natural household and personal care products.

The company has also grown its high-quality job base, doubling the size of its team to 113 in 2011.

All of Seventh Generation’s products, raw materials, byproducts, and processes are sustainable.

3) King Arthur Flour, after nearly 225 years in business, their secret is: focusing on employees.

They began as a family-owned business before transitioning towards an employee-ownership model in 1996 and finally becoming 100% employee owned and thriving.

An employee-owned B Corp, KAF has the freedom to emphasize values beyond profit, like environmental responsibility, community engagement, and the wellness and satisfaction of employees.

More than 80% of health care premiums are paid for families and both full- and part-time employees receive a living wage.

Source: Fast Company and B Lab who has also profiled Revolution Foods, Better World Books, Happy Family, Guayaki, DIRTT, and Sungevity–companies who model making money while making a positive difference in the world.

What is your organization’s ranking of the value of people in what it does?